COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:26/LM/Mar12
(014704)
In the matter between:
Oakleaf Investments Holdings 76 (Proprietary) Limited Acquiring Firm
And
Opiconsivia Investments 230 (Proprietary) LimitedTarget Firm
Panel : YasminCarrim (Presiding Member),
AndiswaNdoni(Tribunal Member)
MediMokuena (Tribunal Member)
Heard on : 02 May 2012
Order issued on : 02 May 2012
Reasons issued on : 07 May 2012
Reasons for Decision
Approval
1] On 2 May 2012 the Competition Tribunal unconditionally approved
the merger between Oakleaf Investments Holdings 76 (Proprietary)
Limited and Opiconsivia Investments 230 (Proprietary) Limited. The
reasons for approving the proposed transaction follow below.
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Parties to the transaction
2] The primary acquiring firm is Oakleaf Investments Holdings 76
(Proprietary) Limited (“Oakleaf”), a special purpose vehicle
established and wholly controlled by Pembani Group (Proprietary)
Limited (“Pembani”) for the sole purpose of recapitalising AfriSam
Consortium. Pembani is a private company incorporated in terms of
the company laws of South Africa.
The primary target firm is Opiconsivia Investments 230 (Proprietary)
Limited (“Opiconsivia 230”), a special purpose vehicle established
exclusively for the recapitalisation of AfriSam Consortium by the
Government Employees Pension Fund (GEPF), represented by the
Public Investment Corporation Limited (“PIC”). GEPF controls 62% of
Opiconsivia 230. Pembani, through Oakleaf, holds a minority, non-
controlling share of 38%.
Neither Oakleaf nor Opiconsivia 230 conducts any activities. Pembani
is an investment holding company with an investment focus on the
petroleum and coal mining industries, and infrastructure projects.
AfriSam Consortium supplies construction materials, specifically
cement, concrete, aggregates and slagment, and operates in Southern
Africa.
Proposed transaction
3] Prior to the proposed transaction, AfriSam Consortium was
recapitalised, in the course of which the Government Employees
Pension Fund (GEPF), through the Public Investment Corporation
(PIC), transferred its 99.8% shareholding in AfriSam Consortium to
Opiconsivia 230.Pembani then acquired a minority, non-controlling
38% stake in Opiconsivia 230 through Oakleaf Investments.
4] The proposed transaction will not alter the ownership structure of
Opiconsivia 230 to any significant degree but will result in a change
in control:
a. Pembani, through Oakleaf, will acquire the right to exercise
the majority vote on resolutions proposed at AfriSam
Consortium’s shareholders meetings.PIC will still retain
control of AfriSam Consortium by virtue of its 57%
control of AfriSam Consortium by virtue of its 57%
shareholding (section 12(2)(a) of the Competition Act),
butPembaniwill acquire joint control under section 12(2)(b)
and section 12(2)(g) of the Competition Act.
b. In addition, to simplify AfriSam’s group structure, three
minority shareholders, Holcim/Cemasco, Bunker Hills
Investments 128 (Pty) Ltd and a staff management trust, will
acquire non-controlling minority interests in AfriSam
Consortium through Opiconsivia 230 of 2%, 1.5% and 1.5%
2
respectively.
Rationale for the transaction
5] According to Pembani, this investment in the construction industry
is part of its broader strategy to diversify its investments.
Furthermore Pembani seeks investments where it has the ability to
influence the strategy of the company. Pembani currently has a
non-controlling interest in AfriSam Consortium and the proposed
transaction will grant it the ability to influence the strategic direction
of AfriSam Consortium and direct its growth in Africa, which is in
line with its investment policy.
From GEPF’s perspective, the proposed transaction enables it to share
the risk of the investment in AfriSam Consortium with another,
experienced investor and to acquire equity capital to alleviate the
Consortium’s debt burden.
The relevant market and the impact on competition
6] Neither Pembani nor its controllers provide any products, or render
any services, which compete with AfriSam Consortium. The
Competition Commission thus found that there is no overlap in the
activities of the merging parties, their subsidiaries and their parent
companies.
7] Since there is no overlap in the merging parties’ activities and there
is also no vertical relationship, the proposed transaction is unlikely
to substantially prevent or lessen competition in any of the relevant
markets.
Public interest
8] The merging parties submitted that the proposed transaction will
have no adverse effects on employment1. No other public interest
issues arise as a result of this transaction.
CONCLUSION
9] Having regard to the facts above, we find that the proposed merger
is unlikely to substantially lessen or prevent competition in any of
the relevant markets. Furthermore, the proposed transaction raises
no public interest concerns. Accordingly, we approve the merger
unconditionally.
____________________ 07 May 2012
Yasmin Carrim DATE
1 See page 16 of the merger record.
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ANdoni and M Mokuena concurring.
Tribunal Researcher: Elizabeth Preston-Whyte
For the merging parties: DerukshaChetty of Edward Nathan Sonnenbergs
For the Commission: MogauAphane and NompucukoNontombana
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